HomeMy WebLinkAbout12-10-93 (2)
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IN RE ESTATE OF ROBERT M. MUMMA,
Late of Cumberland County,
pennsylvania
: IN THE COURT OF COMMON PLEAS
: OF CUMBERLAND COUNTY,
PENNSYLVANIA
:
: NO. 21-86-398
: ORPHANS' COURT DIVISION
RESPONSE WITH NEW MATTER OF THE ESTATE
OF ROBERT M. MUMMA TO PETITION TO ENJOIN
SALE OF ESTATE'S SHAREHOLDER INTEREST
IN LEBANON ROCK,INC.
Now comes the Estate of Robert M. Mumma ("Estate"), by its
counsel, Goldberg, Katzman & Shipman, P.C., to make this Response
with New Matter to the Petition to Enjoin the Sale of the Estate's
Stock in Lebanon Rock, Inc., averring in support thereof as
follows:
1. Admitted, except that it is averred that RMMII disclaimed
his interest under said will.
2. Admitted; it is further averred that RMMII is bringing
this action improperly only to achieve his desire to own the
Estate's stock in Lebanon Rock, Inc., and not to provide a benefit
to all of the parties in interest in the Estate.
3. Admitted.
4. Admitted.
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5. Admitted.
6. Admitted.
7. Admi tted. It is further averred that the purchase
arrangement for Lebanon Rock, Inc. was an integral element of the
transaction referred to in paragraph 6 of the Petition.
8. Admitted. The date eRR notified the Executrices of their
exercise of the option and purchase of the Estate's interest in
Lebanon Rock, Inc. was November 17, 1993; the intention to exercise
was made known to Petitioner's counsel several days prior t:hereto.
9. Denied as stating a conclusion of law concerning a legal
document. By way of further denial, the Will does provide the
Executrices the power and authority to sell Estate assets as well
as providing "the fullest power and authority" to "dispose of any
and all of the property". It also specifically empowers the
Trustees, who are the same persons serving as Executors, and to
whom the Lebanon Rock stock is to be distributed, to grant an
option.
10. Denied as stated. The option Agreement was presented to
the Orphan I s Court as part of the transaction referred to in
paragraph 6 of the Petition in the action brought by Petitioner who
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attempted to enj oin said transaction, and Petitioner raised no
issue at that time concerning the need for Court approval of the
Option Agreement. The Court, by Sheely, P.J., refused to enter a
Rule to Show Cause in that proceeding and thereby permitted the
sale of the Estate I s interest in the pennsy businesses, which
included the grant of the subject option, to proceed. A copy of
President Judge Sheely's Opinion and Order is attached hereto as
Exhibit "A".
11. Denied as stated. section 3354 of the Code speaks for
itself.
12. Denied as stating a conclusion of law; even if without
authority, the option Agreement is not thereby rendered "illegal".
By way of further denial, the Executrices have the power to sell
the Estate's shares in Lebanon Rock to CRR, pursuant to ~3351 of
the Code; irrespective of the existence, or validity of the option,
such sale is the valid action that Petitioner is improperly seeking
to restrain. Further, the option Agreement ceased to exist as of
November 17, 1993, when it was exercised and thereby became a valid
agreement of sale.
13. Denied as stating a conclusion of law. By way of further
denial, 93355 is not applicable in this case, since the authority
to sell is specifically provided for in the Will; see also,
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averments of paragraphs 10 and 12 above, which are incorporated
herein by reference as if more fully set forth. The Executrices
were intending to enter into an Agreement of Sale with Kodie
incident to the Closing scheduled for December 13, 1993, a copy of
which is attached hereto a.nd marked Exhibit "B".
14. Admitted that said al:,ticle states as set forth in the
Petition; however, it is denied that said provision limits the
Executrices or prohibits the sale of the Estate I s Lebanon Rock
stock to CRH. Said provision, by way of denial of any such
limitation being implied by Petitioner, has already been held by
this court's decision of March 8, 1989, to be merely precatory.
The fact that RMMII was not entitled to any preferential treatment
is illustrated by the fact that he was not named as an Executor or
Trustee, thus vesting the management of the Estate's businesses in
family members that did not include RMMII.
15. Denied.
(a) Exhibit B is unsigned and, by its own language, is
void as of October 28, 1993;
(b) the commitment is to Lebanon Rock, not to RMMII
personally, and would expose the Estate to the risk of loss based
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upon the possibility of a fraudulent conveyance being asserted by
creditors of Lebanon Rock;
(c) as set forth in Exhibit "B", the consideration to be
received from CRR substantially exceeds the "offer" proposed by
RMMII; it consists of:
i. a cash payment of ($2,OOO,000);
ii. $160,000 paid for the option;
iii. relieving the Estate of substantial potential
liabilities and indemnity obligations related to claims of RMMII,
which he claims total in excess of $3,000,00;
iv. waiving a potential obligation by the Estate to
return $500,000 of the Pennsy purchase receipts.
Additionally, Respondents' experience with RMMII over the years
confirms that he is not trustworthy and acts in defiance of written
agreements: see, Opinion of Judge Hess in the action brought in
this Court to No. 21 Equity, 1993, attached hereto as Exhibit "C".
Also, the Superior Court noted in its July 3, 1991, Memorandum
Opinion, RMMII "will exceed all bounds to force a favorable
result".
Whether or not RMMII has ever made or now makes any offer to
buy the Estate's interest in Lebanon Rock, such fact does not form
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the basis for the relief sought by him, as he has an adequate
remedy at law under 20 Pa.C.S. 93360.
16. Denied, as the option Agreement speaks for itself.
Furthermore, the issue now is not the validity of the option
Agreement, that having been exercised more than three weeks ago.
The Estate could have independently decided to sell its Lebanon
Rock stock to eRR without the need for a preceding option, and in
fact is doing so. The language contemplates only RMMII's
persistent pattern over the past six years to constantly harass the
Executrices with a barrage of legal actions, and to attempt to
oppress them and the Estate beneficiaries by his spurious lawsuits.
17. The first sentence is admitted. It is also admitted that
the "closing" on the stock sale is scheduled to occur on December
13, 1993. All other averments are denied.
18. Denied. The averment states a conclusion of law, which
even if true, cannot affect the pending sale of stock to eRR, which
is within the power of the Executrices irrespective of the Option
Agreement. There is no likelihood of success on the merits to
restrain the sale or to compel the Executrices to accept the
proposal suggested by RMMII. Any invalidity of the Option is now
a moot point.
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19. Admitted that the Executrices are required to act in the
best interests of the Estate and to maximize the value of Estate
assets, and further averred that the Executrices are, in fact and
in law, doing so by pursuing the sale of the Lebanon Rock stock to
eRH under all the relevant terms and conditions attendant thereto.
20. Denied. The Court does not have the authority to compel
the Estate to accept the proposal set forth by RMMII in any event,
and RMMII has cited no authority for this position.
(a) admitted, and further averred that sale to a CRH
company was an integral part of the pennsy transaction;
(b) any invalidity of the option is completely
irrelevant and moot;
(c) admitted that RMMII owns 50% of the stock of Lebanon
Rock, Inc.; his alleged desire to buy the Estate's shares is
contrary to his recent ongoing proposals to Kodie and CRR to sell
his Lebanon Rock stock to them. He most likely is using this Court
and harassing the Estate with this lawsuit in an effort to demand
a higher price for sale of his stock in Lebanon Rock. In any
event, his desire to buy is a personal thing which is completely
irrelevant and provides no basis for the relief requested.
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(d) The existence of a commitment is denied, and the
averments of paragraph 15(a) and (b) above are herewith
incorporated by reference. The offer proposed by RMMII is clearly
not the highest offer, and the averments of paragraph 15(c) are
herewith incorporated by reference.
(e) Denied, the averments of paragraph 14 are herewith
incorporated by reference.
21. Denied as stating a conclusion of law. The averments of
paragraph 20 are herewith incorporated by reference. Furthermore
denied on the basis that the alleged harm, if any, is not
irreparable, being fully compensable in money damages in a
surcharge action to be pursued against the Executrices by RMMII
pursuant to 20 Pa.C.S. ~3360. The Executrices have not breached
any fiduciary duty and have not failed to maximize the value of
Estate assets; the legality of the option agreement is immaterial
to the issue of whether the stock at issue can be sold to eRR, and
the sale contemplated will not violate the decedent's wishes. It
is Petitioner who, through more than five years of harassing
litigation, is causing harm to the Estate. President Judge Sheely
has already recognized that the prior actions of RMMII caused the
Estate to lose approximately $20,000,000 in the ultimate sale of
Estate assets to eRR this July (see Finding of Fact no. 13, Exhibit
"A"). The fact that RMMII personally might suffer irreparable harm
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is irrelevant but in any event, he has waived any ri.ghts to assert
such a claim as set forth hereafter in New Matter.
22. Denied. There is no right to equitable relief because
there is an adequate remedy at law under 20 Pa.C.S. 93360. That
position would still authorize the Executrices to consummate the
sale of Lebanon Rock stock in accordance with the Agreement of
Sale, Exhibit "B" hereof.
23. Denied. There is no right to equatable relief because
there is an adequate remedy at law under 20 Pa.C.S. 93360. Also,
the averments of paragraphs 20 and 21 are herewith incorporated by
reference.
(a) Additionally, compared to Petitioner's present
offer, as well as his offer of $1,200,000 for the Estate's stock,
made by his attorneys in a letter dated March 18, 1992, neither of
which offers included a withdrawal of RMMII's claims related to
Lebanon Rock in excess of $3,000,000 against the Estate, the total
consideration which the Estate will receive from CRH is not grossly
inadequate and is indeed fair and reasonable.
(b) There is not an "alleged", but an actual deadlock in
Lebanon Rock caused by RMMII's unilateral domination of it without
consultation with or involvement of the Estate, and his illegal
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self-dealing which has diverted hundreds of thousands of dollars
from Lebanon Rock to him personally, to the great detriment of the
Estate. RMMII's proposal does not include release of claims. In
Oauphin County Court recently, RMMII alleged that the sale by the
Estate of its Lebanon Rock stock to Kodie or CRR pursuant to the
exercise of the option would remove the need for a custodian and
would be beneficial to Lebanon Rock: see, Motion, etc. attached as
Exhibit "0".
(c) By giving up the many valuable benefits to be
obtained from eRR, the Executrices would be depriving the Estate of
fair consideration for this stock. The only claim would be that
which RMMII has asserted herein, and, consistent with past
practice, will likely be added to the voluminous list of objections
which RMMII has already filed to the Account filed by the
Executrices.
(d) This Court has already ruled that Article THIRTEENTH
of the will is merely precatory, and that ruling is final.
Moreover, said Article makes no reference to Petitioner.
24. Denied. There is no right to equitable relief because
there is an adequate remedy at law under 20 Pa.C.S. ~3360.
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WHEREFORE, the Executrices pray that the relief requested by
Petitioners be denied.
NEW MATTER
25. The Option Agreement about which Petitioner complai.ns is
moot, since it was to last only 120 days from JUly 21, 1993, which
time limit expired on November 18, 1993.
26. The Executrices have the power under the Will without
court approval to sell the Estate's interest in r~banon Rock as in
their discretion appears best, irrespective of the existence or
validity of an option.
27. Petitioner has waived any objection to the Option
Agreement by failing to raise said objection during the 120 day
period the option Agreement was in effect, and is estopped frcm now
contesting it.
28. Petitioner is estopped to object to the sale of stock to
CRH, as in other proceedings involving Lebanon Rock, in Dauphin
County, RMMII has predicated his position upon a recognition of the
validity of the option and the ultimate sale of the stock to CRR.
29. There is no basis in law or fact for requesting the Court
to compel a sale of the Estate's Lebanon Rock stock to RMMII.
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30. The Court is without power to compel the Executrices t.o
sell the Lebanon Rock stock, and RMMII has not alleged any basis
for such relief.
31. The relief requested is barred by the doctrine of laches.
RMMII knew about the Option Agreement no later than July 12, 1993,
and knew of the exercise of said option no later than November 17,
1993, the former being almost 5 months, and the latter being more
than 3 weeks, prior to filing the instant matter.
32. RMMII does not come to equity with clean hands and he is,
therefore, not entitled to equitable relief.
33. RMMII has an adequate remedy at law.
34. There is no irreparable harm, and any harm, if proven, i.5
compensable at law.
35. Petitioners' right to relief is not clear and it is not
likely that they will succeed on the merits.
36. Granting the relief requested would cause greater harm
than denying same.
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37. The total consideration offered by CRR for the Estate's
Lebanon Rock stock is not grossly inadequate, and it far exceeds
the consideration allegedly being offered by RMMII.
38. The Estate's authority to sell the Lebanon Rock stock is
an issue similar to that decided by President Judge Sheely, Exhi.bi t
"A", and RMMII is collaterally estopped from challenging the sale.
WHEREFORE, Respondent prays that the relief requested be
denied and the petition be dismissed.
Respectfully submitted,
GOLDBERG, KATZMAN & SHIPMAN, P.C.
By:
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Rohald M. Katzm Esquire
Michael A. Finio, Esquire
P.O. Box 1268
Harrisburg, PA 17108-1268
(717) 234-4161
Counsel for the Estate
DATE: December 10, 1993
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VERIFICATION
I, Ronald M. Katzman, state that I am the attorney for the
party filing the foregoing document, that I make this Verification
as an attorney pursuant to Pa.R.C.P. 1024(c), because the parties
I represent lack sufficient knowledge or information upon which to
make a verification and/or because I have greater personal
knowledge of the information and belief than that of the parties
for whom I make this Verification, and that I have sufficient
knowledge or information and belief, based upon my investigation of
the matters averred or denied in the foregoing document; and that
this statement is made subject to the penalties of 18 Pa.C.S.
@4904, relating to unsworn falsification to authorities.
~_tlP~f $.1
Ronald M. Katzma , Esquire
Dated: December 10, 1993
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I RO. 21-86-3'8
D Itlt, JmGuAB~"OK .1PIn.Dt.l...... dI~aw
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OPDlrcnr gD OIlDU 0.. ClOUIl~
Her. we are e.aked to Qecid.; 1) wheth= th.u:e i. A
threat of ~-qedl..t. and ine~llil harm that ."...~. Cl4ftDOt
remedJ' 2) ~har the h:iury a. .. rllsult of deuyinll the
iIljUllC:ticm smat bit gnater tha%l the i%1;u:1:7 &. a ruuU of
IJl:'QUq tJMa equit~le nUet; and 3) wh.t.her tJte 93:'&nt of the
1D:i1mCti0ll will px:opedy restore the ~rt;i.II. to ~ 8ituati01l. A"
11;. exb~ prLoz' to thll allegec1 W2:ClDgful C'oJ:ld~. lIeaxings were
held for . prelillinaQ' injunotiol1 on .nJly 26 aDd July 27, 1993,
upoJl Whiob the following fl.ndinga of faClt are mad.e.
pnmIWGS or FJU~'l'
.... Dl.al.......,
1. Robert M. KWIIIIIa (here1Daftez; tbe Dececlellt) died 0lI
April 12, 1986 .
2. IU. wife, Barbara 1Cc~. HIl--. (b.x.in.f~er :&arl>UA
MoJ:. J, and. lUll daughter. L.1._ IC. MOrlian (h8X'einafter Li..), Arll
the lIJUtGI11:ric.. of the Satlll:4 of 'tho 1)eCloodent aDd tmllt..lI of the
Mad'tal !'Rat lUlder the will.
.
3. ~h. neceQ.nt.'1l eon, Robert M. KQJIIII4, Jr.
(bel'eJ.ad~r Robert), filed a dl.lIolaime;c: Ilnc1er hi. :fat.her'. will
6~iJ)if II"
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110. 21..1e..29.
CD JanU&rY 12, U87.
... 'rhe effect ot the l1J..aclu.-r ill tha~ JlotHtrt 1.
treated .. 11 ~ pra-deceaHd his f.tber. ~hll. Jiobart'. children
would ~.. IL1a iat.re.~ under the Dec;e<1e~'='s w111.
s. Iobltrl: M" Prey, Esr;tU!z:. (llere1Aafter GuaJ:diatl), vall
..ppcI11i~ .. guardiu ad lit.. to represent t.he interest of
Robert'. a1IlQ~ children on DIlcember 29, 19.8S.
I. on June 20, 1989, Robert fila"- a paUtloll t.o r_aka
M. dlaol.J...r.
1. 'rllia court; dlond ltobert to revoke hi. clillC:lailaer
Oil HaJ:Cb 21, 1991.
8. ~be effegt of the revocation i. ~t Robert w1.11 no
lODger be ""ted as if be pre-deceased his fAther. Thus, Robert.
rather 'than hi. ehUdt'en, will take under the necec1ent'. will.
,. ~ plus to appeal the Karob 21, 19'1
deoJ...i.oA ~o t.IIe l'e_a:rl.,.~ su~lo,/; Court on btIha1f of 1:be
mile: o"i 1 drOll.
10. Glklrdien'll atancU.ng is depencieJl.'t on the 8uped.or
court'. xulillg on this court's March 21, 1991 deaisioD.
orbe .eaat:1at:iap.
12. Li_ end lSaz;bara MQ~. as o.f.fi<:ars of the
c:o~.~J.o~. antered 1nta negotiations to ..11 vcriQU" ...ets and
propeR!.. uDIIlpddn; t!1a Pennsy supply bual.De.ee. to C1UI
Indu.t%i.. in the latter part of 1988.
13. C1Ul ofte::ecl. to buy Pennay Supply, but the deal
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JIO. 21-86-UI
fell througb because of thr.atll of l1t.1gatioa. IlIIlde by Roben
QDIIUnq J'eIUUlY 'apply approx1Jaately $20 1I!J.llion d.ollar..
U. Xu the II1IJIIIUr of 1989, 1tDberl IlIAd. aD offer of hill
own to buy ~ha l'etlDay Supply bulnelllGeB.
15. 011. Decaaber 9, 1991, Jtotlen _de an o:U~ to enter
1l890t1ati0ll8 fox the purchue 0; the pannsy SUpply bI1aitl_lIea for
$35 aillion dolLars.
16. fte te=- of the December 9 offe~ iDcl12e!e,
... l Jtobel:t VOI1ld own All lltook and .aseta
of B1De lliuty-.1De, . be ., pe!l.1UlY Sapply,
IRC,. BlaDellftcnra QoarriBa, IDe., lfewpo=
QIlar%1', Bender'. Quarry, Silver Spriug
Q\luz::r, I.ebanon t\or:k, IDe.. ADd. xu... ..alty.
b) Rt>bert woule! own tho.e oCllllpuica IlJ1d
tbeiz auets free aJId c:l_r ot all ex.i&ting
lieus, eJlcWDbranaea, Altd J.iab!l.i.ti.a,
1.neludiDg loDg' 1:8%& eOIlt.rllctlJ, elllPloyment
oonu.aats, BallOutlve COVen&Jl.t., oF-ion :right.s
and U11 rights of fu.t. z:du..l t:o which they
.ay be 8uhj.at.
C I 'ftla fI1:tCha.. agr.ement8 would contain
rep%...ntat101\& .ne! warr~Ue. with non-
cc:llI\Pl.t.e atJZ'-_nta of Li-. and. 8arbara 1fc;::P;.
d) Such pw:ahaae priC!e of $35 Ililu'on
dollar. 11 lNbjllOt t:o adj1l.tlllen~ tor .ny
._~ial adver..- ela&ng:e'Of .uah .a.et:.a
.iDct. the dAte of the l)eoeden~'. dUU..
-I Robert. wOllld OVII. a ~1.lJht. of flr.~
~_fuaA1. in onion guarr1ea wi.1;h the agrecme:nt
thllt bL. mother'. power to wit.hdrawal frgm
t.he marital trust WOIllcl not: e~anc1 to Onlon
~ri.B.
f) llobert tfClllld to. paid ollo-fourtJ\ of the
.rtate end trll8t ...eta either iJl eaeh or in
~ope~y in such _~ftn.~ .. i. satisfactory to
Robert, oft..tt!llq the purcha.. prioe.
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9') !'he BlIt4te and. Madta1~.t will
b<i_aify bbert ag-lIin,'t .ub,equent1y
deYelcp!Ag tax liens 0% lJ.ab.ilitiall and any
_u~nt.el clean-up r..poJl,sibU.i.U.a
relating to Mtiviti.a prior to the c:lodnlJ'
II) All partiee v1U cUac:ontinl1e all legal
aClUcme ~.OUlUy pendi~.
11. 011 DeC8lW9r 30, 1991, L1sa and Barbara HeX. as
-rp~ officer. J:'ejllCted. Robert'. offer in a for.al reply, the
basie of whJ.l:lb vaa; the ~U1'l.t: oHe.nl4, the .Beau invo~ved, the
at:l&1;1UI of the lltigati.on between p~u:,t.i.. IJ.%1d other pellding
"1".--.
18. on March 24, 1992, ttlie court held in a
clooclllr.~ jUcf9'IWDt action ill equ.:i.~ that Robert w.... n....er 'lJiven
.. ri9b1o of Urn ;Alued to purchase the Penney SU&,1ply
bu.u...ee8. Barbll.ra H<:1(. M~ and Li..a Mar9a.n. indi.iduallv and
a. ~~~rle.. ef ~A. R.ta~e of Roh.~ M. MUMmR. dee....d and
~i,pda II. Jto1;;h. pla1ntifh v. :Robert 1(. 111'_... II and Barbara
JIt.o<!lure. ~fend..tq;s, 110, 66 E~ity 1988, OpiDion and Order filed
IW;Qb U, 1'92.
19. 1)urU'1 the spdn'1 of 1992, :Lu. and Barbara Melt.
veDt fo:vard &Del cried to -=-ket tbe P.~n.1' Supply hUIJ.i.nens. to
Hftral other people.
20. In the &l1lIlIIIer of 1992, neg-oUad,onlS re&Wlled with
ClUl.
21. A8 o:f Janl1&Xy 1, 1993, toi.. and Barbaro. MelIt. _re
st.ri<;tl!' ct.aliJS9 wltb eRR bee"un they 1II\:re far dong enough that
they did not consider ..lling to other pot.utl.1 ggy.ra.
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M)W&O-o. 2159635299
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110. 21-86-398
22. Januuy!l, 1993, Lisa aile! Barbara Melt. ~ter.d
int:o . CODf1c1entiaHt:y acp:...nl:.
~ __ .f t:II. ..\.
Z3. All of Kay 8, It'3, Un and B&rb&~. HdC.. entfi"eG
. int:o a lett:.r of !ntent.
24. n. t.e~ of u.. ..1. iDclud..
a) In e:llchanp for -th. $32 1d.lJ.ion
dollar. frCIII CJUI, tbe.. fi" aeparate
buaiAe.. 1Dtue.b _re .otc.,
1) Roell: 1n lU.na IU.l1et:y-1I1ne, Inc.,
t:b. holding company fer the PennlllY Supply
bu81zle..clII ,
ill neale in Bummelatmm Quarry, the
oorporlltiOJl th4t aotual1! ho~c1s the real
_tate whJ.ah lIenullY su.pp y l_aea,
til) eme hundred per cent ownership 0:
~l\cler. Quarry in Nt. Bolly S~iD9..
19) the S1_ten Sue.t. yud., t.be _in
offLae building in Jlan'bburg, and
v) for an al1d.itioual U miUioc.
doll~., ClUJ would. 1)41 given 1410 days f%'Cllll
the dat. of clo.inq to .xuCli.. 4ft option
to buy a 50t in Le!)anon Roelt, IDt:.,
raising the total purcha.. pric. to .$3.
mllloD dollar..
bl ne IIOAeY from the aAle WOQld ~
alloc..~ over the five ..p&z:ato bIla:i.ness
J.nter..ts aDd dutdbuted ac:r:ord1zlg to .ach
.b&nbolcler'. p8J:Cellta9& of ovnez:ebip ,,1~ an
eaerow aeeount tor dl..ent1nq shareholders.
a) C1UI insisted that a cO%'PQrAUon be
f~ BO "that. "tbey eClUld buy the five:
hu.!~... interests .. a whole trom .. .ingle
..Uu LrI order to llI&XimiEe tax benefits _nil
~ avoid law .Diu wittl Robert over the .ale
of each 1n~t. JtCl41e Corporation was
fo~ to COIIIIply with thia de_n~.
5
l.0'd
ElI1l89t>'<ZL ll.l8
01
l:l'1IHd'S 'S''''\.I lGI::/ 19i;f;~ll;~&6l-60-ml:i
~ BY;1I.lIO
.,
; 8- 5-88: l:l:~
NUlfW"
21~~
:. 11/lli
1i1O. 21-86-398
d) Il'Jl1rChasiJ:l9 t:he separate intlllAat.
thxollgh J: 10 Corpor:ation, C1UI B5IJWlleB all of
the Uab.1litiell of each ind.1vidUA1 intere.t.
e) lIon-bl:lBiDeIlB uset. were retained by
t>ebJUlY Supply iD proportion t... the .took
CIVIler.' perClllD1:&f. of OWUH'llbip for futuro
cl.".loPDlel1t.
f) CD avr-d to bonor existing long brill
contracta iDOludillg elIplo~t. COIltraata
~t:ec:tiq 101'J,9 t.o.nI IIIIIployee. anel . Clap 011
CRE'. ri9ht of iDdaNft4f1cation.
'J CRB would awn no iDureut in 'Onion
Qu<<rn IIJId could ODly ob1:aiD a SOt interest
in LeL.aon Rock by plying an adaitional $:1
1I11lloD dollars.
hI The plrChllose price was fixad at $32
tilliOD dollAD, 110 .d~Q.e.-..t.., DO
f.1n&DCiDg, no pledgiDq of PIIIJ08Y Supply'.
a..eta, the full .~t 1u e.sh.
~5. Lilla put U 1I11110D dollars in eac:r:owfor ClUI, $2
mllU.QD dollar. fot' breachea of warranty or covenants fer the
bu.~_. aud. "2 lIIillioD dollars for tully litiCJat1on.
26. 1.8 OWZle:n ot Koelle CoJ:pOratloD, LJ.lJa ~ B&l;billOil
licK. reoeiv8cl DO aepUate consideratioD , 8IIlPleyment. ccmuaet or
c:_ltlDg contract, or .~ate benefits.
27. !rll. Closing of the .ale waa ..'t uf' into two
.tag.., Stave:r ... IIChed.uled for JUly 8, 1993, cmd. gompleUou
of tJa. .-1. c:loeill9l SUCJ8 :n: __ acheduled. at laaat. t.ft days
after tbe not1c. of staqe I waD mailed.
~h. .aUee
28. 8tage J: was scheciuel! fo:!: JUly 8, 1993, but DO
....to. _111 be t.~anaf.rred IIn~ll there was' confirmation that eM
i
OO'd
Ell1lEl9KZi.11. 18
01
~IHd'8 ''8'''\.1 q;loGI=/ GZ:H ffi6ti~.d
~ BY:II)JO
.,
; 8- 5-93; 18:$;
MDW&O-+ .
21~D5
.
:1 ll/lt!
BO. 21-16-391
releued ~ U2 ti1HoR dollar..
29. On July 9, 1\193, notices wer~ llailed to the nDn-
p&J:t.ioiplltj,gg .t.oglcho!derB, who, at that:. tille, were ..obert &1U1
BUb;u-a McClure.
30. 8y....,. of power of Attorney, B&X'b.u:& IIcClure
..igned OD .. A participating atoc:lthold.er leav1h9 Robert as the
ooly DOD-participat.U1q ahareholder.
31. Wotice WA. .ent to aU .luI.reholc1era purauant to
av..lll... CGqJOrlltion law (~Ll, 15 'A. C.S.A. 51'766(1:1), tmd .ing"
the ai~ e1lUdl:eD _re not: ahareholdu8, no Dotioe vaa sent to
Guu4ian .
32. Sta<<;e U was scheduled for Jllly 2D, 1993, in order
to cClllIply with DeL requlatioa, 15 l'a. C.B.A. S1766(c).
~ p~l'-...r9 rBi~ab~taB
33. Robert actllAlly received. hi. notice of Stage I of
th....l. Qloe1ng on ~uly 12,1993.
34. Guat'dian 1l!lClrtled of the 5Uge I Cllcsi~ on Friday,
o7U1y 16, 19n, fralll Itobert vho encouraqecl GUudilln to file 6-
prtiUcm f~ &II. ex parte preliminary injungti.OIl..
35. ~hm:e wa. IlP undent.arldinq betweon Robert and.
Cl1arcUau that Cu-ai_ would file far "he prdilllicAry .i.njllDOtJ.on
whlah Robert would later join and Robert would ona. aqain
diaala.lla any interest UJader U. fAther' 8 will.
315. Guardian filed. III petition ou Monday, July 19,
1!J9J, fOJ: III prelhtiMr.y iftju=Uon .eek.ing to enjoin th. sa3." ot
.,
60"d. .~ll;~a
01
l:f1IHdi,ai.,18',.W lolJ&I ZG:H ~66l-6IH)ll:i
~ BY:1IlIIO
; 8- 5-113
13:31
MDWIO-- 21~
:lI'lU/lli
110. 21-86-398
lriJI.. MiIlety-1IiJ1e. Inc.. And 8U1111l1elstown Quarry aDd a rule to sbow
eau.. .my the sale ot those e..sets should not be approved by this
COUrt.
31. ItotIen joUied 1n ~e petit.i.on July 21. 1993, lnlt
to da-te bU Dot ~J..claJmed hi. inter.at in h.la father'. win.
JI. A copy ot tb.e petition vae not e.u:ved OIl Lisa,
l',futle, JlaJ:bara licit. f or Ba~~a McClurfo.
39. On July 21, 1993, this court denied the ex parte
ujllDOtloJ:l bit: ..t; . liat.e fo:r Ii heo.x1nq OD July 26, 1'93.
40. stage II of th. .al. closil1fJ was completed July
21, 1993, and they did not learn of the petition for the
iDjun~on until .fte~ the c10&iu9'
.1. A .har.holder.' meeting was held JUly 22. 1993,
'lfhere Stoep J: and rr of the 5.1e 0100in<1 w.s ratJ.fie4 by a
...jor1t.7 en the shareholders.
42. fte pX'OClee4a f.tOlll the sal_ _rll allocated over
each of the five buaue.a intllrests and distributed aocordinq to
each ....:-Qolde.r'. percent.qa 1n ownerBbi.p of tho.e interests
with aD eeorov accowat tor cU..anting .bareholders.
DISCUS.IOII:
a. at<"'arf Dol -...tev
XnjUllO't:Lve relief, in particular a prol~-
in:1um:tJ..on is COll..14er~ fan aJdraoaU.nllry r~y and IlIILY oll1.y De
e
m'd
~ll.t8
01
1:f1! Hd'8 '1l'TW WIJlfJ}~~ln E66 t-60-ID:l
!W'lf' BY: II>WO
: 8- 5-93
l~:~r :
D&o-o 215~S2SS
:#11/16
lQO. 21-16-398
g:ut.lKf it 'the llOVinq party hAa ..tAb1.bhed & clear d9ht to the
relief .aa9'ht. Soia V-. ~actcrvville ~ort:a_n'lI ~lub. 36~ pa.
Super. 47~, .77, 522 A.2d 1129, 1131 (1987). Furthe~re, 4
pnll_f "lU'y iD'lUlCtion whicll qoe$ beyoud r..t.ra.int and eollIIIlallda
."ion i. r...~ for umulual ."aa.... Id. orb. Ure8hold iaau.
the court II1lt address is wh.thu the aO'9'iDg pany 'fill .ucc:leed
on the .-r:lt. of ita olaa. iU. Leen..rd. II't a1. V'. 'l'hentburch.
.1; .1., 15 Pa. c~. 553, 558, 463 A.2d 77, 80 (1983). ~
prelf...~QU7 bjunctioll will only b. granted whe%e the _inq
pu1:y ean 4_Ast:-a1;e that tu.. prrroquiaitea exi8t J 1) tho:-.
is . ~eat o~ haecli&ta and ir~.par.bl.. bArlll that c1al114gea c.umot
relDed.J'; 2) -the injw:y AI a rasult of denying the .injunction llU18t
be gr..~er than tbe inju%y A' a %.lIu1t of granting the equitable
reUefr .u1d 3) the g:ant of the injunction IllUlIt properly restoro
~. pan!.. to the .ita.tion .s it e~sted prior to tbe alleged
~'llf\ll concSuot. schaeffer 1/'. Prr:.y. 403 l'a. super. SliO, 56',
58g A.2d 752. 755 (1991). Finally, a ~.view of this doci~ion i.
Uaited t;o "h6th.~ there u-e any appIlrently r....onab1e 9X'ounrh
~OJ: t.be action taken by this conrt. I!L. at 564, S89 I..2d at 7U.
n. 1I.~.h1acr a Cl.a~ Ili!ht to lle]"illf by --.t.ratlIlQ the
~.""'llh~ D~ .tKloe... oa ~h. "'&"i.~..
orhe orux of thla ilIaue 1:'811'01-... around tho l09alit:y 0:
t.be sale of the "odie corporat.ion 1;0 CRB. on one hand, Robert:
~ta1n. that the Nle violated thCt notice providon. of the
ll1lo1ne.. Corporate Law' (BCe) , U Pat C.S.A. S176&(cl which
51
nOd
~.1..8
01
I:f1IHd"a '8"""\.1 ~ ~:n ~66~-60-EnI
~ BY:1IlIO
; 8- 5-93: 13:3~:
D&O-t. 215Q635299
:112/t6
RO. 21-85-39&
prOVLle.1
(0) aueeU"._.. vf ac=UOIl !Iy partial
_it:... aaa....t:.-An ao~Lm take.. ENI:.UOA~ t:o
nbaect.i.oD (hl (relatuq to a.ct1on peaa1tted
to M bba " thol1t: a ...tiDg I.lpoA paRi.l
wrJ.t.t.a con..nt:) _hall ~ become e!feati._
lIDt:'u' af1:.r lit: leut t.1I daya written noUce
o! the a.at.ioll haa been 9!ven to ellClh
.hareholder entitled to vote theJ:ecm who b..
not COIlaenUld thereto. ~. .~.ectlOD IlAY
not be ~laxed by any praviBion (If thne
&n1cl...
vncser the 1lCL, .. penon 18 deeme4 to bave );lean 9i ven notice when
the laotie. b deposited i.a the mail. 15 Pa. C.S.A. 51702(&:
Fov.l.d..1
ca) o.lleral nle--Wheneve::- ~itten notice
1. ~ired to be lJiven to eAy perSOll a.ncier
'the.. provia,t.ona of this sllbput or by the
arlicl.. or by la.s of &ll:J buain...
ca.r;poraticm, it __}' be given to the person
eith.r pBJ:sona.lly or by aending .. copy
thereof by first cl.ss or expre&. .-il. . . .
rf t}e n~ic. !. ...nt ~ ~~1, -blegraph or
e~ lG' ..rviee, it:. IIh.Ii be dlt:r'd to hav~
:e: ~*:i.::dt~: ~;.:i:~i:i:te:h=!Oor
v tb .. telegraph offiae or cou~.1ln: serviclI
for dlllivery i;o ~bat perSOIl oX", in th4a 0...
ot telex or 'l'WXt when diBpatchlld (~Il.phui.
added) .
Jobc-t u1ntJOinllJ that the Stage I cloai.n~ Val ineffecti.ve becau.~
he ~1..od notice through the IlIAil on July 12, 1993, .0 it could
.~ be 1ft .ff..,-t ua.H.~ Ju~y 23, 1993. Bgwever, ~ ~tle. va.
llepositd ~ the JIIlrll July g, 1993, eo 1\obert :La deemed to hllve
beeI1 ~.on notice on the 9th. ThUI, t.he Stage I alo.in!jl -. in
effect on Jul}' U, 19>>3, when the Stage II c1ol1nl;l W&II fi11alized.
'fbe abaraholden bad II. meeting JUly 22, 1993, aI1d ratified the
10
~l"d B0b~~~1~18
01
tfl!Hd"e:,'S'TW l-W.:l l>'~:n ffiGl-6liHn;j
SBtIl' BY:1I)1IO
'; 8- 5-93: 13:~:,
II:JW&O-t' 215S63529S
;'13/16
JIO. 21-16-3!1f
nle. We fuel thuafore that notice wa. ~ly filed within the
pr~t.iOD. of 15 Pa. C.S.A. S1766(al.
Robosrl aleo dJ.epIJhd the fOrlll of the ZloU~ l1iven. Be
_illt.in. tbat 'there _. no .~l'M8iQQ of when the .ale WOQld. be
'eOIIIplete. 801.~-r, t:he notice IUd that the R1e WO\l1d. J:)e
CC3IPleUd .. pw:m1tted. UDder the prod.loll8 of 15 Pa. C.B .A.
51765(0). w. &1.0 Und that th. Dot.ic. .ent aclequat.ely illfo.rmed
Bohen of wen 'the eale WIl8 to be oClllpleted. SilIae the Jlotiae
. v.. adeq,uau and va. t.iaely filed.. we do Dot believe it ill likely
that Robert. vll1 8Ucc:eed on t:lle lIe::it.. of the Clase.
On +.he other haltd, CJuu:clian .....inuin., that the ...1.
.houle! be ea.jaizled. be<:aa.S8 the e1E~ut.::ic:elil 4nd truetee. :ueciocl
court approval. Obvi.o~.ly they have t.he power to ..11 ..tate
...M't.. t.o C1UI 1Uld~r 20 1'.. C:.8 .A. 13354. Otber than the bald
.....rtion of s.lf 4ea11nq by Rabe~, tbe avidenoe pre.ented 1a
lmOOJl1Orll410ted that 1) At the i1uIistence of CRB, ttocU,e
co:poratloD v.. useel .. .. vehicle for the a.le, and 2) neitner
the u.cutric.. ~ tnl.t... recei.ed any .eparate or additional
cCllllpeJl8&'l;ion ~ benefit frOlll the s4le. It ill cur fi.nding: ~t
GuarcU.n, who.. tJtaDding ia tenlloUS, ie not likely to IrUcoeed. on
the _d.t. of . c:aim that the sale 1.8 voJ.d due to a.lf-deaU.Ag.
Ill. !'be %aillZY 1D Dea"illq t:h" :ta:l1Ulct:loft Veftl_ t:h. %JliurY in
araD~l., ~h. !.1UDa~io8.
X.an if we a..ume for the sake Clf argument, tbat there
.
1. an 1Iaed1.ate aDd irrepara1l1e harm which dllll\llq.. cannot r__dy.
11
n'd
~ll.le
Ool
lf11l-ld"8 '8"'-101 ~;:fl>'G;:n ffi61-60-9fl:1
SfNI' 8Y: IlIlII\)
....
; 8~ 5-93: lS:a2;
NIlII&O-< 21SS6352llll
"14/16
110. 2:1-16-3"1
WI .u:'e not persuaded 1:rClll the tlV:l.dIl!nce that the j,lljU~ f~OIIl
deD7U!f t:be 1a;lUDQtion OI1tweiq~ the 11ljuxy frotll 9"rantiD9 t.he
1njunc:tJ.on. If 1M deny the injunction, llobert .ill not have en
opport;UDJ.tyo to bgy tllese particular busin"I.I. However, WE! have
prllV.i.aae17 ~Jdecl u&t ~ hAs AO :iCJb~ of fuat :efg..1.
t'her. a.iJlply ia no duty to .v~ ..ll the.. bURin.ases t.o Roben.
So be "7 nll'9'G: hAve the opport.unity to buy the.. parti.cula:::
bu.iu..... 4IftIl if _ gJ:ant the injunction.
A11;e=atively. we have already lied. the findinq that
tbe ...1. ia CCIIl>lete and clOeed. 80 to 'Iret the injunotion at
thia poUt VCl1ld _an that tbe $.32 1IIillion dollar .ale and tbe
prcoeCa therefS'Cllll which have b..n diatribated lUILDRi 1:he
Ih.u:'ebolcl.era, would be reaeLlded. ~hia meane that they would be
liable for ~heir percentage of the earning.,. CltB who hall been
rannill9 .emmy Supply _lel have to atop and hand it bAck.
~.nnal 8upp1r WOUld Dot only lOBe an attractive offer but other
potential .ib.,..t;oz:. _ld be dbcoaraged fOrJllbuyinq PennllY
8apply Clal1.inq the pIlrehalle price to fall even lowez:. UlIIO, W.
.u:'8 Dot ..t1.fLed that Robert 1. pEeSently financially able to
bay Pesuley Supply. Gru.ti.Zl.q til. injlmCtion would force l'ennay
Supply tD ,J:". up its bud 1n the band tor a handfo1 of
UAoarta1ati... ~here:ore, we are not satisfied that the injury
from deayinlJ the injUl\ot.lon outweighs the injury frCllll grllnting
the 1njll,Dct.ion.
n. pr..._1Dg t:1l. abatll* Gullo
12
vl"d
OOEb~EUll.la
01
I:flIHcl'E! 'S'TW loW:! vc:,n E66T-60-EO;I
5EM' St': IIJIlO
.':t.
, 6- 5-83; 13:38;
Mllll&O-'
215ll6352a9
;#15/16
HO. 21-:-1f-39'
Our Dext determination is whether qrantinq the.
laj~ wlll restore the partJ,es to the sitnatioD - it
ezJ..~ pz1= 1:0 the allegsd wrwJ.Vful conduct. prior to the
c::loaiDg of ~. lale, Robert had no ri9'ht of first refulal and
I..l._ aDd "':1:& NoIt. decided not 1:0 .Be1l -to Robert. Robert
_14 be 121 the SlUM! positiOJl if ve were to qrmt this
injunotion. lowever, penuy Supply volllcS not be 111 the Bame
pont.iaa.. rrior to the closi~, they hlld a buyer willinq 'to pal'
UZ II1.lUou 4oJ.lu. in oasb aloug w1th tavo;ral)le te:rmll under the
aale. If the injuncrl;ion we:. ~.atc4, PenMY Supply would a~fer
. ~..-.d.0l1. 3.0... Ifherefore, we f1ud thAt groantin9' the
in~unct1oD will not ~estor. the pareies to the aituation .B it
ex1.~.pr~ to the closing of the nle.
v. CoDql,alOll
rn abort, neither peIorty C1eek.l.ng the preliminary
injUDQt10D bave e.tabliahed a clear right to the relief they
...t. Add1tiondly, it is oar opidon based on the evidOZlOEl
prea.tecl1:bat qrandng the J.njuDction would result: in doin9 JIIO%'.
baDl t:hu U _ nfue. to qrut the injunotion. 1'111411y I it au%'
belief that grAftting the injunotion will not reetore tbe parties
to ~. .i.i:R..tion aB it existed prior to the cloainCiJ of the s.le.
'.!herefont. _ etlter the f'ollowin'1 ordc:."
'Siaae _ are cSeny1nq a preLi1I!inuy 1njunc'tion, we ar1J not
z;~PId t"o aur 4,deore. niai. See, pet.ro Y. Kennedv. '1'$*ftahip
Board ft. ~~4.sioners, 49 pa. Commw. '05, 311, 411 A.2d 849, &52
(1980).
13
Si'd
~tl.ia
OJ.
\:f1IHd"a 'll'Tloli;,t~ sz:n ffi6l,;.60-!Jll:j
,
...~. '"
9, . d "l:llOl.
..llG\rl DI'IIIUIIU
. .
.....,....... .
~...,...~.....
.' U- ~CIII) ,
.
.IU'''''''' I
.
110. 21-86-3'8
M1) 1I01f, thill
mmBJl OJ" CO11M'
dAy of
, 19'3, we he....by J)U'r
tba peUUoI!. for a prel1",hulry injlUlgtioR ud JlUUSS to ente~ a
rule to -.bow 01U1.. OD the above-cap~iOlled _tter.
By the Court.
J.I Harold B. Sheal.."
Harold E. Sheely, 1'..:1.
.Cbar~... ab1elda, III, Isquire
hi: Roben IC. .-. n
Hue OZ. IoImedeld, Zaquire
Braliy L. eked, Batpire
!'ox: ~. JIgS ""- aDd u.s. M. Morvan
1..0 V. ot1:o, 111, .squire
I'or Baz:bara liaS: JIImmIa auc1 U.. K. _organ
lI,;.....vd w. ftnenaon, Isquire
~~ ~. IC. HoCl\J%'1l
JoIan B. 7:0UD<,J, ..~
~ :L1Dda H. Itoth
Gerald Ii. JIorrl110b., Saquu-e
par ~ K. KwaDa, II
"vIfU1: IC. 1':1:117, zequire,
Gnmie ad 11t.aD
Illbf
.
14
9. 'd .~~~.~~'1.18
:.:::lt1'lj;d0a~~~ll8;",~;ili~ld:-;:':Ji:~,:,>,st:':i'i~;1~\:r "
"Y,~t,.;~,~~..,."..,~W:_(9,..".."", ; .,.......' ,-,.>t,.,,,",
AGREEMENT TO SELL STOCK
THIS AGREEMENT is entered into on the
day of
, 1993, by and among Lisa Mumma Morgan and Barbara McK.
Mumma, Co-Executrices ("Co-Executrices") of the Estate of Robert M.
Mumma, deceased ("Estate") and Kodie Acquisition corp. ("Kodie").
1.
SALE OF STOCK.
The CO-Executrices, on behalf of the
Estate, hereby agree to sell the Estate's five thousand (5,000)
shares of the common stock of Lebanon Rock, Inc.
("LRI")
representing fifty per-cent (50%) of the outstanding stock of LRI,
to Kodie Acquisition Corp., its successors and assigns, for the
following consideration:
a) The sum of two million dollars ($2,000,000.00) in
cash or immediately available funds to be paid at Closing
on December 13, 1993;
b) release by Rodie of the five hundred thousand dollar
($500,000.00) potential refund claim as set forth in
~12.4 of the Subscription Agreement entered into as of
July 21, 1993, by Radie and, inter alia, the Estate;
c) termination of the indemnification obligation of the
Estate and others for legal fees and costs related to
Exhl 6"1 +
"Dc!'.::;
4ijl'';:~:;-
",,;;~~';:,-Wi~i.~~-i :~'!:~
,,,,,",,,,I,lli:i,"
.
.
Elco/Lebanon Rock litigation as set forth in ~12.4 of the
Subscription Agreement;
d) termination of liability and indemnity obligations
of the Estate for eight (8) legal actions i.nvolving
Elco/Lebanon Rock litigation as set forth in H.7.1,
Schedule 4.7.1, 94.19 and ~A.6 of Schedule 4.19 of the
Subscription Agreement.
2. PAYMENT AND DELIVERY. At a closing to be held at the
offices of Goldberg, Katzman & Shipman, P.C. in Harrisburg, PA at
10:00 a.m. on December 13, 1993, the Co-Executrices, on behalf of
the Estate shall deliver to Kodie appropriate documents
representing the Estate's interest in the shares so purchased.
3. REPRESENTATIONS AND WARRANTIES OF THE CO-EXE~UTRICES.
The Co-Executrices hereby represent and warrant, and at the
closing for the purchase by Kodie of the shares the Estate will
represent and warrant, that a) the Estate is the holder of record
of the shares transferred to Kodie at the Closing, and such shares
are free and clear of all liens, encumbrances, voting agreements,
shareholder agreements, equities, preemptive rights, options,
claims, charges and restrictions whatsoever; b) the Estate has the
power, right, capacity and authority to execute and deliver this
Agreement, and to sell, transfer, and deliver the shares to Kodie
in accordance with the terms, covenants and conditions of this
2
Agreement; c) this Agreement has been duly and validly executed and
delivered by the Estate for and on behalf of the Estate and
constitutes a valid and binding agreement of the Estate,
enforceable against the Estate in accordance with its terms; d) the
Estate is not subject to or bound by any agreement or judgment,
order, writ, prohibition, inj unction or decree of any court or
other governmental body which would prevent the execution, delivery
or performance of this Agreement, or the sale, transfer or delivery
of the shares to Kodie as contemplated hereby; and e) the shares
have been duly authorized, validly issued, fully paid, and are
nonassessable.
4. FURTHER ASSURANCES. Kodie and the Co-Executrices will
execute and deliver all such further documents and instruments and
take all such further action as may be necessary in order to
consummate the transactions contemplated hereby.
5. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be an original, but all of which
together shall constitute one and the same Agreement.
6. TIME OF THE ESSENCE. The Co-Executrices and Kodie agree
that time shall be of the essence in the performance of all
obligations hereunder.
3
.
7. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties, their heirs, personal
representatives, respective successors and permitted assigns.
IN WITNESS WHEREOF, the Estate and Kodie have caused this
Agreement to be duly executed by the Co-Executrices and by Kodie's
duly authorized officers, respectively, the date first set forth
above.
BARBARA
MORGAN,
ESTATE
DECEASED
McK. MUMMA AND
CO-EXECUTRICES
OF ROBERT
LISA MUMMA
OF THE
M. MUMMA,
Lisa Mumma Morgan, Co-Executrice
Barbara McK. Mumma, Co-Executrice
KODIE ACQUISITION CORP.
By:
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-41
AUG 2 1993'
BARBARA McK MUMMA and
USA M. MORGAN,
Co-Executrices of the
Estate of Robert M. Mumma,
I;>eceased,
IN THE COURT OF COMMON PLEAS OF
CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiffs
NO. 21 EQUITY 1993
vs.
---
ROBERT M. MUMMA, II,
Defendant
IN EQUITY
IN RE: OPINION PURSUANT TO RULE 1925
The instant appeal is from our order of the 27th of May, 1993, granting the
request of the plaintiffs for a preliminary injunction. By that order, we enjoined any withdrawal,
by the defendant, of certain proceeds of the sale of a parcel of real estate in Lemoyne,
Pennsylvania. That property, known as Lemoyne Square, was sold on or about April 16, 1993.
The sale resulted in net proceeds of approximately $537,762.00.
Our hearing on May 26, 1993, has led us to the foHowing factual findings. The
Mumma Estate of which the plaintiffs are co-executrices is being administered in Cumberland
County. Among the assets of the estate is a fifty percent ownership interest in a Florida
corporation named High-Spec, Inc. The defendant, Robert M. Mumma II, is the other fifty
percent owner. The assets of High-Spec, Inc.,in Pennsylvania, consisted of the parcel of real
estate in Lemoyne Square, Lemoyne, Pennsylvania. Litigation between the estate and Robert M.
Mumma II, with respect to High-Spec, Inc., has been going on in the courts in the state of
Florida. Incident to a Florida mediation procedure, the plaintiffs and the defendant executed an
agreement on November 25,1991, wherein defendant promised, inter alia, with respect to any
sale of the Lemoyne Square property, that the net sale proceeds thereof would be deposited in
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NO. 21 EQUITY 1993
an interest bearing attorney trust account or CD to be held by Jerry Duffie, Esquire, a
Cumberland C.ounty attorney, for the benefit of the parties. Despite this agreement, the
defendant herein failed to deliver the net proceeds of the sale of the real estate to Mr. Duffie
and, instead, deposited it in a certificate of deposit in his own name.
Our order, from which the defendant appeals, requires him to provide the
plaintiffs with the identity of the certificate of deposit, by account number, to reveal the exact
amount on deposit, and to name the institution involved. In addition, it "freezes" the account,
permitting no withdrawal thereof except if same is authorized by a court of competent
jurisdiction. Our order, we believe, simply maintains the status quo in a manner that is least
inconvenient to the parties.
With respect to preliminary injunctions, the Pennsylvania Supreme Court has
stated as follows:
Three criteria have been established for the granting
of a preliminary injunction .... They are: (1) the
preliminary injunction must be necessary to prevent
immediate and irreparable harm which could not be
compensated for by damages; (2) greater injury
would result from the denial of the preliminary
injunction than from the granting of it; and (3) it
would operate to restore the parties to he status
quo as it existed prior to the alleged wrongful
conduct. In addition, to meet in all three criteria,
the court must be convinced that [plaintiff's] right to
a preliminary injunction is clear... and general
equity jurisdiction must be warranted.
Committee of Seventv v. Albert, 33 Pa.Commw. 44,49,381 A.2d 188, 190 (1977) (auotin!!. Credit
Alliance CofJl. v. Philadelphia Minh Man Car Wash Corp., 450 Pa. 367, 371, 301 A.2d 816, 818
(1973)). "In order to obtain a preliminary injunction, the movant must ... 'make a strong showing
that it is likely to prevail on the merits' and ... 'show that without such relief [the movant] would
2
,,'
NO. 21 EQUTII' 1993
be irreparably injured.'" Enterra Corooration v. SGS Associates. 600 F.Supp. 678, 683 (E.D.Pa.
187) (Quoting Klitzman. Klitzman & Gallal!her v. Krut. 744 F.2d 955,958-59 (3d CiL 1984)).
A preliminary injunction which is more than restrictive or prohibitory - which goes
beyond restraint and commands action - is reserved for "unusual cases." Soia v. Factorvville
Sportsmen's Club. 361 Pa.Super. 473, 477, 522 A2d 1129, 1131 (1987). Our order of May 27,
1993, is strictly restrictive or prohibitive and no action is commanded.
In his Statement of Matters Complained of On Appeal, the defendant gives three
reasons for having appealed from our order. He contends that the plaintiffs failed to prove
imminent or irreparable harm, that the plaintiffs have an adequate remedy at law and that, in
any event, a preliminary injunction should not have been issued by us because there is a pending
suit with regard to related matters in the state of Florida.
This is a case in which there has been a flagrant and entirely unexplained violation
of an earlier agreement to place a substantial sum of money in escrow. We recognize that Mr.
Mumma has placed the money in a certificate of deposit, but the fact remains that there is
nothing to prevent his imminent dissipation of these funds.
The defendant suggests that, because this case involves the escrow of money, there
is, by definition, a remedy at law in money damages. This equates to an argument that no
agreements for the escrow of monies are enforceable in equity because, by definition, money
damages are awardable on a breach. The defendant's proposed legal remedy is a suit in
assumpsit. This entails, of course, the risk that, in the meantime, the proceeds of the sale of one
Lemoyne Square will be dissipated by the defendant.
While the defendant certainly posits a legal remedy, it is inapposite to the matter
at hand. The remedy sought by the plaintiffs, here, is to prevent the dissipation of the asset.
3
. '
NO. 21 EQUITY 1993
There is no action at law that can be brought for that purpose. To the contralY, the only kind of
action that can be brought for that purpose is the one instituted in the instant equity case.
Monetary compensation could doubtless be awarded as a result of just about any evil sought to
be enjoined in equity. The defendant would have us believe that the mere fact that some day a
Suit in assumpsit might lie, the plaintiffs are estopped from preserving the status quo, today, in
equity. In order to bar injunctive relief, the remedy at law must be adeauate and complete. The
rules in this regard have been stated as follows:
It is difficult, if not impossible, to formulate a
definition or rule that will be a sufficient guide in
all cases in determining the existence of a legal
remedy of such an adequate and complete character
as will preclude relief by injunction. The matter
must be determined from the facts and
circumstances of each particular case. It is not
enough that there is a remedy at law. The remedy,
in order to preclude injunction, must be certain and
reasonably prompt, and as practicable and efficient
to the ends of justice and its administration, both in
respect to the final relief and the mode of obtaining
it, as an injunction would be. The chief cause of
the inadequacy of the remedies at law lies in the
fact that the injury is irreparable or will occasion a
multiplicity of suits. A legal remedy is never
adequate if the injured party will suffer irreparable
injury by being forced to resort to it, even though
he may ultimately prevail.
42 Am Jur 2d., Injunctions Section 40. In this case, it is abundantly clear that if injunctive relief
is denied, the assets which are the subject of this action dissipated, and the plaintiffs forced to
resort to actions at law, that the within litigation will be greatly and needlessly protracted and
will not, in any event, result in the remedy sought by the plaintiffs; namely, that the proceeds of
the sale of Lemoyne Square be placed in escrow in accordance with the prior agreement of the
parties. In light of the defendant's failure to set forth any reason why he should not comply with
4
NO. 21 EQUITY 1993
the earlier agreement of the parties, his assertion that the plaintiffs cannot resort to equity ~o
enforce it is particularly surprising.
Finally, the defendant contends that we should have dismissed the plaintiffs'
motion for preliminary injunction and, in fact, should have dismissed the underlying complaint
because of the pendency of a prior action in Florida. Indeed, there is a lawsuit pending in the
state of Florida which seeks, inter alia, to liquidate a corporation known as High-Spec, Inc.
pursuant to the appropriate provisions of Florida law. The suit also seeks the imposition of a
constructive trust but not on Pennsylvania real estate. Instead, the complaint makes reference to
a parcel of property at Sailfish Point in Martin County, Florida.
The agreement to escrow the proceeds of the sale of Lemoyne Square was entered
into ancillary to the litigation in Florida. The agreement of the parties, dated November 25,
1991, pursuant to which we issued the instant preliminary injunction, provides for the escrow of
the Lemoyne Square proceeds "pending resolution of case number 89-503, Fennelly Estate of
Mumma et aI. v. Robert Mumma II and High-Spec, Inc., in the Circuit Court of Martin County,
Florida, or until mutual agreement of the parties." Nothing in our order of preliminary
injunction will prevent compliance with this provision. To the contrary, withdrawal of the
proceeds is permitted, by the terms of our order, when "same is authorized by a court of
competent jurisdiction." Moreover, nothing in our order for injunction will prevent either side
from petitioning this court for dissolution of the order based on the outcome of the Florida
litigation.
In the meantime, we are satisfied that the issues in the Florida litigation are not
the same as those before us. While the plaintiffs have filed a motion in Florida, seeking to have
the defendant held in contempt by virtue of his failure to comply with the November 25, 1991,
5
. _0
.
NO. 21 EQUITY 1993
agreement, there is no request pending, in the Florida courts, to prevent the defendant's
withdrawal of the sums on deposit at the Dauphin Deposit Bank. While we agree with the
defendant that we could defer to the state of Florida in this matter, we do not agree with him
that the issuance of an injunction in this county represents a "duplication of effort and waste of
judicial resources that would result from allowing both cases to proceed simultaneously, in a race
to judgment." We must, and will, defer to any ultimate disposition of the case in Florida
inasmuch as the resolution of that litigation, by the terms of the November 1991 agreement,
control the disposition of the escrowed funds. In the meantime, our maintenance of the status
quo pending the outcome of the Florida litigation serves not only the ends of judicial economy
but of equity as well.
July .3 0 ,1993
.d-
l/Ronald M. Katzman, Esquire
For the Plaintiffs
Sarah M. Bricknell, Esquire
For the Defendant
:rlm
6
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IN THE COURT OF COMMON PLEAS OF DAUPHIN COUNTY,
PENNSYLVANIA
CIVIL ACTION - LAW
IN RE LITIGATION INVOLVING . Nos. 3210 S 1.988
.
BLCO CONCRETE PRODUCTS, INC. . 4678 EQUITY
.
LEBANON ROCK, INC.; ROBERT M. . 4722 EQUITY
.
MUMMA, II; LISA MUMMA MORGAN . 4744 EQUITY
.
BARBARA MClt, MUMMA; THE ESTATE .
.
OF ROBERT M. MUMMA, ET AL. .
.
MOTION TO DISMISS AS MOOT PROCEEDINGS FOR THE APPOINTMENT
OF A CUSTODIAN OR DISSOLUTION OF LEBANON ROCK. INC
Robert M. Mumma, II, ("Mr. Mumma"), on his own behalf
and derivatively on behalf of Lebanon Rock, respectfully moves
this Court to enter an Order dismissing as moot proceedings
relating to appointing a custodian for, or ordering dissolution
of, Lebanon Rock, Inc. ("Lebanon Rock"). In support of this
Motion, Mr. Mumma avers as follows:
1. These proceedings on appointing a custodian for,
or diSSOlving, Lebanon Rock are pending because of a purported
deadlock between family factions each controlling 50% of the
shares of Lebanon Rock. The Estate of Robert M. Mumma (the
"Estate"), controlled by Lisa Mumma Morgan ("Mrs. Morgan"), and
Barbara McK. Mumma ("Mrs. Mumma"), as Co-Executrices, owned 50%
of the stock; Mr. Mumma has the other 50%.
2. On July 21, 1993, the Estate sold various business
interests to CRH plc, including an option on the Estate's 50%
interest in Lebanon Rock.
3. CRH has exercised the option. Closing will occur
on December 13, 1993.
OS8: 181399.1
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4. Accordingly, the Estate is only a nominal party as
its interest in Lebanon Rock will cease on December 13, 1993.
The internecine hostility no longer will have any impact on the
operation of Lebanon Rock.
5. There is neither claim nor evidence that Lebanon
Rock is unable to operate under its new ownership structure.
6. Thus, these proceedings directed at appointing a
custodian for Lebanon Rock or dissolving Lebanon Rock are moot.
WHEREFORE, for all the foregoing reasons, Robert M.
Mumma, II, respectfully requests that the proceedings on
appointing a custodian or dissolving Lebanon Rock be dismissed.
~.ttU~
H. R~bert ~iebach '
David I. Bookspan
WOLF, BLOCK SCHORR & SOLIS-COHEN
Twelfth Floor Packard Building
S.E. Corner 15th & Chestnut Streets
Philadelphia, PA 19102-2678
and
Yvette Kane
WOLF, BLOCK, SCHORR & SOLIS-COHEN
306 N. Front Street
Suite 401
HarriSburg, PA 17101
Attorneys for Robert M. Mumma, II
OS8: 181399.1
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CERTIFICATE OF SERVICE
I hereby certify that I am this date serving a copy of the
foregoing document upon the person{s) and in the manner indicated
below, which service satisfies the requirements of the pennsylvania
Rules of civil Procedure, by hand delivering a copy of same to:
John B. Consevage, Esq.
Buchanan Ingersoll
30 North Third Street
8th Floor Vartan Parc
Harrisburg, PA 17108-2023
By:
GOLDBERG, KATZMAN & SHIPMAN, P.C.
I!.M~A~~
Ronald M. Ka zma Esquire
320 Market Street
P. O. Box 1268
Harrisburg, PA 17108-1268
(717) 233-4161
Attorney 1.0. #07198
Attorneys for the Estate
Dated: December 10, 1993